119 S3378 IS: Helping Undergraduate Students Thrive with Long-Term Earnings Act
U.S. Senate
2025-12-04
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
II
119th CONGRESS
1st Session
S. 3378
IN THE SENATE OF THE UNITED STATES
December 4, 2025
Mrs. Blackburn (for herself and Ms. Cantwell) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to establish name, image, and likeness investment accounts for student-athletes, and for other purposes.
1.

Short title
This Act may be cited as the “Helping Undergraduate Students Thrive with Long-Term Earnings Act” or the “HUSTLE Act”.
2.

NIL investment accounts
(a)

In general
Subchapter F of chapter 1 of the Internal Revenue Code of 1986, as amended by section 70204 of Public Law 119–21, is amended by adding at the end the following new part:
“X

NIL Investment Accounts
530B.

NIL investment accounts
(a)

General rule
An NIL investment account shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, the NIL investment account shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).
(b)

Definitions and special rules
For purposes of this section:
(1)

Designated beneficiary
The term designated beneficiary means the eligible athlete who established the NIL investment account and is the owner of such account.
(2)

Eligible athlete
(A)

In general
The term eligible athlete means an individual who—
(i)
is enrolled as a student at a participating institution of higher education, and
(ii)
participates in an amateur or collegiate athletic program.
(B)

Secretarial authority
The Secretary, in consultation with the Secretary of Education, shall have the authority to—
(i)
further define the criteria for participation in an amateur or collegiate athletic program for purposes of subparagraph (A)(ii),
(ii)
establish procedures for verifying an individual's status as an eligible athlete, and
(iii)
issue guidance regarding the application of the requirements described in subparagraph (A) in cases where an individual's enrollment or athletic participation status changes during a taxable year.
(3)

Participating institution of higher education
(A)

In general
For purposes of this section, the term participating institution of higher education means an institution of higher education which elects (pursuant to subparagraph (B)) to participate under this section and to comply with any requirements applicable to such institution of higher education under this section.
(B)

Election and revocation
(i)

Election
Any election made by an institution of higher education to participate under this section shall be effective for the academic year with respect to which it is made and for all subsequent academic years and, once made, may be revoked only pursuant to clause (ii).
(ii)

Revocation
A revocation of an election described in clause (i) may be made by an institution of higher education only if—
(I)
such institution of higher education provides notice of such revocation to all eligible athletes enrolled at such institution of higher education, and
(II)
such revocation takes effect no earlier than the first academic year beginning after the date which is 12 months after the date on which the notice described in subclause (I) has been provided.
(C)

Institution of higher education
For purposes of this section, the term institution of higher education has the same meaning given such term in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002).
(4)

NIL investment account
The term NIL investment account means a trust created or organized in the United States exclusively for the purpose of receiving contributions of qualified NIL income and providing distributions to the individual who is the designated beneficiary of the trust (and designated as an NIL investment account at the time created or organized), but only if the written governing instrument creating the trust meets the following requirements:
(A)
No contribution will be accepted—
(i)
unless it is in cash and is made by an eligible athlete from qualified NIL income, or
(ii)
except in the case of rollover contributions, if such contribution would not be permitted under paragraph (6).
(B)
The trustee is a bank (as defined in section 408(n)) or another person who demonstrates to the satisfaction of the Secretary that the manner in which that person will administer the trust will be consistent with the requirements of this section.
(C)
No part of the trust assets will be invested in life insurance contracts.
(D)
The assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund.
(5)

Qualified NIL income
The term qualified NIL income means any income received by an eligible athlete that is derived from the use of such athlete's name, image, or likeness, including endorsements, appearances, social media content creation, and licensing arrangements.
(6)

Contribution limitations
No contribution will be accepted to an NIL investment account for any eligible athlete—
(A)
which, for any taxable year, is in excess of the dollar amount determined under section 2503(b) for the calendar year in which such taxable year began, and
(B)
after the end of the fifth taxable year in which such athlete—
(i)
has received qualified NIL income, and
(ii)
was enrolled at a participating institution of higher education.
(7)

Treatment of contributions
With respect to any qualified NIL income received by an eligible athlete which is contributed to an NIL investment account, at the election of such eligible athlete, gross income shall not include such qualified NIL income.
(8)

Treatment of self-employment taxes
(A)

In general
For purposes of chapter 2 (relating to tax on self-employment income), any qualified NIL income contributed to an NIL investment account for which an election has been made pursuant to paragraph (7) shall not be taken into account as net earnings from self-employment (within the meaning of section 1402(a)) for the taxable year of contribution.
(B)

Distributions
Any distribution from an NIL investment account that is includible in gross income under subsection (c)(1) shall be treated as net earnings from self-employment (within the meaning of section 1402(a)) for purposes of chapter 2 in the taxable year of distribution.
(9)

Limitations
Rules similar to the rules of paragraphs (4) and (5) of section 529(b) shall apply for purposes of this section.
(c)

Tax treatment of distributions
(1)

In general
Any distribution from an NIL investment account shall be includible in the gross income of the distributee in the manner as provided under section 72 to the extent not excluded from gross income under any other provision of this chapter.
(2)

Tax treatment of distributions
(A)

In general
For purposes of applying paragraph (1), a distribution shall be treated as—
(i)
includible in gross income and taxed as ordinary income if made before the date on which the designated beneficiary—
(I)
graduates from a participating institution of higher education (as provided in subparagraph (D)), or
(II)
transfers from a participating institution of higher education to a non-participating institution of higher education (as provided in subparagraph (E)), and
(ii)
includible in gross income and taxed at the rate applicable to long-term capital gains under section 1(h) if made on or after the date on which the designated beneficiary—
(I)
graduates from a participating institution of higher education (as provided in subparagraph (D)), or
(II)
transfers from a participating institution of higher education to a non-participating institution of higher education (as provided in subparagraph (E)),
but, for purposes of clause (ii), only to the extent that such distribution does not exceed the limitation described in subparagraph (B) for the taxable year.
(B)

Limitation on preferential tax treatment
(i)

In general
The amount of distributions from an NIL investment account that may be taxed at the rate applicable to long-term capital gain under subparagraph (A)(ii) during any taxable year shall not exceed the amount described under section 1(h)(1)(B)(i) for an individual described in section 1(c).
(ii)

Excess amounts
Any distribution exceeding the limitation under clause (i) shall be includible in gross income, taxed as ordinary income, and (except in the case of a qualified distribution described in paragraph (3)(B)) subject to the additional tax under paragraph (3)(A).
(C)

Student transfers between institutions
(i)

In general
In the case of a designated beneficiary who transfers from one participating institution of higher education to another participating institution of higher education (referred to in this subparagraph as the subsequent institution), the graduation date for purposes of this section shall be the date on which the designated beneficiary graduates from the subsequent institution.
(ii)

Notification requirement
A designated beneficiary who transfers to a subsequent institution shall notify the trustee of the NIL investment account of such transfer within 60 days of enrollment at the subsequent institution. The subsequent institution shall, upon the request of the designated beneficiary, confirm such enrollment to the trustee of the NIL investment account.
(iii)

Multiple transfers
The rules of this paragraph shall apply to designated beneficiaries who transfer between multiple participating institutions of higher education, with each subsequent institution being treated as the relevant institution for purposes of determining the graduation date.
(D)

Certification of graduation
The participating institution of higher education from which the designated beneficiary graduates shall transmit documentation of the designated beneficiary's graduation directly to the trustee of the NIL investment account. The Secretary shall prescribe the form and manner of such certification.
(E)

Transfer to non-participating institution of higher education
In the case of a designated beneficiary who transfers from a participating institution of higher education to a non-participating institution of higher education, the participating institution of higher education shall notify the trustee of the NIL investment account of such transfer.
(3)

Additional tax for distributions not used for qualified expenses
(A)

In general
The tax imposed by this chapter for any taxable year on any taxpayer who receives a distribution from an NIL investment account—
(i)
before the date on which the designated beneficiary graduates from an institution of higher education (as provided in paragraph (2)(D)), or
(ii)
in the case of a distribution described in paragraph (2)(A)(ii), which is in excess of the limitation under paragraph (2)(B)(i),
shall be increased by 10 percent of the amount which is includible in gross income, unless such distribution is a qualified distribution.
(B)

Qualified distributions
For purposes of subparagraph (A), a distribution shall be treated as a qualified distribution if—
(i)
the distribution is made to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary,
(ii)
the distribution is attributable to the designated beneficiary's being disabled (within the meaning of section 72(m)(7)),
(iii)
the distribution is used for qualified expenses of the designated beneficiary, or
(iv)
the distribution is part of a rollover contribution described in paragraph (4).
(C)

Qualified expenses
For purposes of subparagraph (B)(iii), the term qualified expenses means expenses incurred by the designated beneficiary for any of the following:
(i)
Career transition costs, including—
(I)
professional training, certification, or education costs,
(II)
moving expenses (as defined in section 217(b)) related to post-athletic career opportunities, or
(III)
professional services related to career planning and development.
(ii)
Qualified higher education expenses (as defined in section 529(e)(3)) of the designated beneficiary.
(iii)
Qualified medical expenses (as defined in section 213(d)) of the designated beneficiary to the extent such expenses exceed 7.5 percent of the designated beneficiary's adjusted gross income for the taxable year in which such expenses are incurred.
(iv)
Such other purposes as are determined appropriate by the Secretary.
(D)

Contributions returned before certain date
Subparagraph (A) shall not apply to the distribution of any contribution made during a taxable year if—
(i)
such distribution is received on or before the day prescribed by law (including extensions of time) for filing such designated beneficiary's return for such taxable year, and
(ii)
such distribution is accompanied by the amount of net income attributable to such excess contribution.
In the case of such a distribution, for purposes of section 61, any net income described in clause (ii) shall be included in gross income for the taxable year in which such excess contribution was made.
(4)

Change in beneficiaries or programs
(A)

Rollovers
Paragraph (1) shall not apply to that portion of any distribution from an NIL investment account which, within 60 days of such distribution, is transferred into another NIL investment account for the benefit of—
(i)
the designated beneficiary, or
(ii)
an eligible athlete who is a member of the family of such beneficiary.
(B)

Change in designated beneficiaries
Any change in the designated beneficiary of an NIL investment account shall not be treated as a distribution for purposes of paragraph (1) if the new beneficiary is—
(i)
an eligible athlete for such taxable year, and
(ii)
a member of the family of the former beneficiary.
(C)

Limitation on certain rollovers
Subparagraph (A) shall not apply to any transfer if such transfer occurs within 12 months from the date of a previous transfer to any NIL investment account for the benefit of the designated beneficiary.
(5)

Special rules for applying estate and gift taxes with respect to account
Rules similar to the rules of paragraphs (2), (4), and (5) of section 529(c) shall apply for purposes of this section.
(6)

Member of the family
For purposes of this subsection, the term member of the family means, with respect to any designated beneficiary, an individual who bears a relationship to such beneficiary which is described in section 529(e)(2).
(7)

Loss of NIL investment account treatment
If an NIL investment account is established for a designated beneficiary, no account subsequently established for such beneficiary shall be treated as an NIL investment account. The preceding sentence shall not apply in the case of an account established for purposes of a transfer described in paragraph (4)(A) if the transferor account is closed as of the end of the 60-day period referred to in such paragraph.
(8)

Transition to retirement accounts
(A)

In general
Subject to subparagraph (C), an individual who has ceased to be an eligible athlete for at least 1 year may elect to convert their NIL investment account, in whole or in part, to—
(i)
an individual retirement account (as defined in section 408(a)),
(ii)
a Roth IRA (as defined in section 408A(b)), or
(iii)
such other retirement arrangements as the Secretary may specify in regulations.
(B)

Tax treatment
A conversion under subparagraph (A) shall be treated as a rollover contribution for purposes of this title.
(C)

Lifetime limitation
With respect to any individual described in subparagraph (A), the amount of any conversion of any NIL investment account to any other account or arrangement described in clause (i), (ii), or (iii) of such subparagraph during any taxable year shall not exceed the excess (if any) of $35,000 over the aggregate amount of any prior conversions under this paragraph with respect to such individual for all prior taxable years.
(d)

Tax treatment of accounts
Rules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to any NIL investment account.
(e)

Education requirements
(1)

In general
The trustee of an NIL investment account shall make available to the designated beneficiary educational materials regarding—
(A)
the benefits and rules of the NIL investment account,
(B)
basic principles of investing and financial planning,
(C)
the importance of long-term financial security, and
(D)
such other topics as the Secretary may specify in regulations.
(2)

Delivery of materials
The educational materials required under paragraph (1) shall be provided to a designated beneficiary—
(A)
upon the establishment of an NIL investment account, and
(B)
on an annual basis thereafter.
(f)

Regulations
The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations—
(1)
to enforce the limitation described in subsection (c)(7),
(2)
providing for the information required to be presented to establish an NIL investment account,
(3)
to identify additional qualified expenses pursuant to subsection (c)(3)(C)(iv),
(4)
to prevent fraud and abuse with respect to amounts claimed as qualified expenses,
(5)
to ensure proper reporting and verification of NIL income sources,
(6)
to establish procedures for tracking the number of taxable years in which an eligible athlete makes contributions to an NIL investment account,
(7)
to establish procedures for determining the annual limit on preferential capital gains treatment under subsection (c)(2)(B),
(8)
to establish procedures for the transition of NIL investment accounts to retirement accounts under subsection (c)(8), and
(9)
to allow for transfers described in subsection (c)(4).”.
(b)

Clerical amendment
The table of parts for subchapter F of chapter 1 of such Code is amended by adding at the end the following new item:
“Part X—NIL Investment Accounts”.
(c)

Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2025.
3.

Student athlete sports agent reform
(a)

In general
The Sports Agent Responsibility and Trust Act (15 U.S.C. 7801 et seq.) is amended—
(1)
in section 2 (15 U.S.C. 7801)—
(A)
by amending paragraph (1) to read as follows:
“(1)

Agency contract
The term agency contract means a written agreement—
(A)
in which a student athlete authorizes a person to negotiate or solicit on behalf of the student athlete a professional sports contract or an endorsement contract; and
(B)
that—
(i)
states the name of each party to the agreement;
(ii)
states the term of the agreement;
(iii)
states the registration information for the athlete agent; and
(iv)
states the fee or commission charged by the athlete agent.”;
(B)
by redesignating paragraphs (3) through (9) as paragraphs (5), (7), (9), (11), (12), (13), and (14), respectively;
(C)
by inserting after paragraph (2) the following:
“(3)

Athletic association
(A)

In general
The term athletic association means any organization or other group organized in the United States that—
(i)
has multiple conferences and institutions as members;
(ii)
sponsors or arranges college athletic competitions between those institutions;
(iii)
sets common rules, standards, procedures, or guidelines for the administration of college athletic competition; and
(iv)
is not a conference.
(B)

Inclusions
The term athletic association includes—
(i)
the National Collegiate Athletic Association; and
(ii)
any other national intercollegiate athletic association.
(4)

Athletic department
The term athletic department means a department at, or a component of, an institution responsible for managing one or more varsity intercollegiate sport programs.”;
(D)
by inserting after paragraph (5), as redesignated by subparagraph (B), the following:
“(6)

College athletic competition
The term college athletic competition means any varsity game, meet, or other competition between or among athletic teams sponsored by institutions.”;
(E)
by inserting after paragraph (7), as so redesignated, the following:
“(8)

Conference
The term conference means any organization that is not an athletic association and that—
(A)
has 2 or more institutions of higher education as members; and
(B)
arranges championships for college athletic competition or sets rules for college athletic competition.”;
(F)
by inserting after paragraph (9), as so redesignated, the following:
“(10)

Institution
The term institution has the meaning given the term institution of higher education in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001).”; and
(G)
by adding at the end the following:
“(15)

Varsity intercollegiate sport
The term varsity intercollegiate sport means a sport played at the intercollegiate level, administered by an athletic department, for which eligibility requirements for participation by student athletes are established by an athletic association.”;
(2)
in section 3 (15 U.S.C. 7802)—
(A)
in subsection (a)—
(i)
in paragraph (2), by striking “; or” and inserting a semicolon;
(ii)
in paragraph (3), by striking the period at the end and inserting a semicolon; and
(iii)
by adding at the end the following:
“(4)
represent a student athlete for an endorsement contract without first entering into an agency contract;
(5)
represent a student athlete for an endorsement contract without the athlete agent first registering as an agent with a State and certifying to an athletic association governing the intercollegiate sport the student athlete participates in that the athlete agent is registered with a State;
(6)
charge a student athlete a fee in connection with an endorsement contract that exceeds 5 percent of the value of the endorsement contract;
(7)
enter into an agency contract with an athlete for a term that extends beyond the eligibility of the student athlete to participate in intercollegiate sport;
(8)
entice a student athlete to enroll at an institution, transfer to or from an institution, or declare an intent to transfer from an institution by misrepresenting the existence, nature, or value of a name, image, or likeness opportunity the athlete agent can arrange on behalf of the student athlete; or
(9)
make a materially false, misleading, deceptive, or fraudulent representation as an athlete agent or in the application for registration as an athlete agent.”; and
(B)
in subsection (b)(3), by striking “Warning to Student Athlete: If you agree orally or in writing to be represented by an agent now or in the future you may lose your eligibility to compete as a student athlete in your sport.”; and
(3)
by inserting after section 3 the following:
“3A.

Registration and other requirements of athlete agents and athletic associations
(a)

Registration requirement
Prior to representing a student athlete for an endorsement contract, a prospective athlete agent must register with a State.
(b)

Registration established
An individual is deemed to be registered with a State for purposes of this section if the individual is—
(1)
a registered professional sports agent with a professional sports league or players association, in good standing; or
(2)
registered and certified under the All State Uniform Agent Acts in the State in which the agent operates, in good standing.
(c)

Agent fee cap
Fees charged by an athlete agent in connection with an endorsement contract entered into by a student athlete shall not exceed 5 percent of the value of the endorsement contract.
(d)

Certification to athletic associations
(1)

Requirement
An athlete agent that represents a student athlete participating in an intercollegiate sport governed by an athletic association must certify to the athletic association that the athlete agent is registered with a State.
(2)

Prohibition
It is unlawful for an individual to certify to an athletic association that the individual is an athlete agent if the individual is not registered with a State.
(e)

Requirements of athletic associations
(1)

Searchable registry
It is unlawful for an athletic association to operate without maintaining a publicly available website that includes a searchable database of athlete agents registered under subsection (a) and certified under subsection (b).
(2)

Website
An athletic association shall include on a publicly available website a working link to, or information on how to locate, the website of the Commission.”.
(b)

Clerical amendment
The table of contents for the Sports Agent Responsibility and Trust Act is amended by inserting after the item relating to section 3 the following:
“Sec. 3A. Registration and other requirements of athlete agents and athletic associations.”.
4.

Private right of action
(a)

In general
The Sports Agent Responsibility and Trust Act (15 U.S.C. 7801 et seq.) is amended by inserting after section 5 the following:
“5A.

Private right of action
(a)

In general
Any current or former student athlete alleging a violation of this Act by an athlete agent (other than a violation of section 6(a)) may bring a civil action against such athlete agent in an appropriate district court of the United States or in an appropriate State court.
(b)

Relief
In a civil action brought under subsection (a) in which the plaintiff prevails, the court may award—
(1)
actual damages;
(2)
reasonable attorney’s fees and litigation costs; and
(3)
injunctive, equitable, or declaratory relief, that the court determines appropriate.
(c)

Invalidity of pre-Dispute arbitration agreements and pre-Dispute joint action waivers
(1)

In general
Notwithstanding any other provision of law, no pre-dispute arbitration agreement or pre-dispute joint action waiver shall be valid or enforceable against a student athlete with respect to a dispute arising under this Act.
(2)

Applicability
Any determination as to whether or how paragraph (1) applies to any dispute shall be made by a court, rather than an arbitrator, without regard to whether the agreement or waiver that is the subject of the dispute purports to delegate such determination to an arbitrator.
(3)

Definitions
In this subsection:
(A)

Pre-dispute arbitration agreement
The term pre-dispute arbitration agreement means any agreement to arbitrate a dispute that has not arisen at the time of the making of the agreement.
(B)

Pre-dispute joint-action waiver
The term pre-dispute joint-action waiver means an agreement, whether or not part of a pre-dispute arbitration agreement, that would prohibit, or waive the right of, one of the parties to the agreement to participate in a joint, class, or collective action in a judicial, arbitral, administrative, or other forum, concerning a dispute that has not yet arisen at the time of the making of the agreement.”.
(b)

Clerical amendment
The table of contents for the Sports Agent Responsibility and Trust Act is amended by inserting after the item relating to section 5 the following:
“Sec. 5A. Private right of action.”.